Press Release - BBC Trust publishes independent report
on the efficiency of radio production at the BBC
5 February 2009
The BBC Trust today (5 February 2009)
published an independent report it had commissioned from the
National Audit Office (NAO) on the efficiency of radio production
at the BBC.
Jeremy Peat, BBC Trustee, said:
“We welcome the NAO’s findings and
recommendations. In 2007 the Trust set a demanding 3% net
cash-releasing annual efficiency target for the BBC, and BBC
network and nations radio has robust plans in place to meet this
target over the coming years. However, we agree with the NAO that
the BBC should adopt a more systematic approach to using
comparative cost data and identifying potential savings. Any work
on potential savings should take account of the possible impact on
output. We have asked the BBC Executive to report back to us in 12
months’ time with progress on key findings from this
report.”
Tim Burr, Comptroller and Auditor General,
said:
“The BBC has already achieved savings in radio
production across its Network and Nations radio services and has
plans in place to make further savings. But the BBC needs a better
understanding of why the cost of producing similar programmes on
its different radio stations varies so widely.”
Efficiency of radio production at the BBC
The NAO review looked at what the BBC is doing to maximise the
efficiency of radio production across its Network and Nations radio
stations, focusing on the use of cost comparisons for similar
programme types within the BBC stations and with commercial
competitors, the BBC’s efficiency plans and the BBC’s assessment of
the impact of efficiency initiatives on performance.
The BBC spent over £460 million on Network and
Nations radio services in 2007-08, producing a diverse mix of
programmes. In the three year period ending March 2008, BBC Network
and Nations radio services delivered efficiency savings of £11.7m
against a target of £11.6m and has targets in place to deliver
further savings of £21.1m in the five years to April 2013. The NAO
found that there was limited documentary evidence that the BBC has
systematically assessed the potential impact of savings on its
radio output and that it has done limited work to examine
significant cost variations. As a result, the NAO concluded that
the BBC is not making full use of opportunities to increase the
value for money it is achieving in radio production. It is
likely that a systematic analysis of the costs and performance of
the most expensive programmes would help the BBC to identify areas
where it could make further efficiency savings.
The Trust has asked the BBC Executive to
report back in 12 months on the progress they have made in
addressing the NAO’s conclusions.
The report has identified a series of
recommendations to improve the efficiency of radio production at
the BBC.
-
The NAO recommends that the BBC should make
full use of its data on the costs of radio production to identify
the scope for potential further efficiency savings across its
Network and Nations stations
The Trust believes that decisions over where
to spend money - or cut costs- should be taken alongside
consideration of the potential impact on services. The least
expensive option is not necessarily the best outcome for audiences.
Nevertheless the Trust believes that the BBC Executive could do
more to demonstrate how they reach their assessments on what
constitutes an appropriate cost for programmes. There is also more
scope for careful use of comparative data. The Trust also notes as
reasonable the BBC Executives’ comments on the need to balance the
cost of detailed benchmarking against the benefits likely to
accrue.
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The NAO recommends that the BBC should
evaluate the effect of proposed savings initiatives using its
performance measurement framework to demonstrate it is delivering
efficiency gains without a decrease in the quality of the listener
experience.
The Trust supports this finding, and has been
instrumental in ensuring that achievement of the savings targets it
has set is measured not only in terms of cost but also in the
quality, reach and impact of performance.
-
The NAO recommends that the BBC should share
ideas and good practice in making efficiency savings more
systematically.
The Trust notes and welcomes the BBC
Executive’s commitment to share good practice through the BBC’s
Radio Network.
-
The NAO recommends that the BBC should explore
with commercial radio stations how they might establish
benchmarking arrangements to identify where and how savings can be
made.
The Trust recognises that there are
difficulties with benchmarking with commercial companies. This is
due to a lack of competition in some areas (e.g. drama), a limit on
what information can be shared under competition law and a
reluctance from other organisations to share commercially sensitive
data. However, the Trust will engage with Radio Centre and ask them
to participate in an ongoing scheme moderated by the Trust. The
Trust also notes that the BBC Executive has commissioned a talent
valuation review and the Trust has required an update on the
actions arising from this review.
Notes for Editors
- It is the responsibility of the BBC Trust, under the Royal
Charter, to ensure that value for money is achieved by the BBC
through its spending of the licence fee. In order to fulfill this
responsibility, the Trust commissions and publishes a series of
independent value for money reviews each year in consultation with
the Comptroller and Auditor General – the head of the NAO. The
reviews are undertaken by the NAO or other external
agencies.
-
This review covers the ten BBC Network radio
stations (BBC Radios 1-5, BBC 1Xtra, BBC Asian Network, BBC Radio 5
Live Sports Extra, 6 Music and BBC 7) and the six Nations stations
(two each for Scotland, Northern Ireland and Wales). The NAO report
does not evaluate matters relating to content and target audiences,
which are matters of editorial judgment for the BBC.
-
The BBC’s efficiency target for the five years
to April 2013 is to reduce spending on Network and Nations radio
stations by £21.1 million, releasing £68.7 million in cumulative
cash efficiency savings (£57.4 million from the Network stations
and £11.3 million from the Nations stations).
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Press notices and reports are available from
the date of publication on the NAO website, which is at
www.nao.org.uk. Hard copies can be obtained from The Stationery
Office on 0845 702 3474.
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The Comptroller and Auditor General, Tim Burr,
is the head of the National Audit Office, which employs some 850
staff. He and the NAO are totally independent of
Government. He certifies the accounts of all Government
departments and a wide range of other public sector bodies; and he
has statutory authority to report to Parliament on the economy,
efficiency and effectiveness with which departments and other
bodies have used their resources.
Media contacts:
Ben Wiseman
Press Officer, BBC Trust
t: 020 7208 9558
m: 07930 393475
f: 020 7208 9670
Phil Groves
Press Officer, National Audit Office
t: 020 7798 5339
m: 07770 678477